Need for Learning Supplier Rationalization
An earlier blog post spoke to the Need to Measure the cost of Training and that very few companies can accurately calculate the total training spend across an organization given the federated nature of global training functions. One of the areas of large spend for training functions is with sourcing training content suppliers to meet various learning needs (Sales, Leadership Development, Project Management, Soft Skills etc.)
In a federated model, each business unit based on their training needs sources their own content, leading to high cost and lack of consistency in training delivery. For instance, Project management courses vary between vendors in their quality and emphasis, even though the subject matter and learning objectives are the same.
One of the key initiatives to control the cost of training spend is to rationalize training content suppliers globally. A typical supplier rationalization project addresses the following business objectives:
Drive adoption of global suppliers, allowing for localization as necessary
Reduce the total number of training content suppliers used, whereby reducing the total learning spend
Balance price, quality, consistency and effectiveness of training. For example, most global companies have projects managed by virtual teams. By ensuring that all teams use the same practices and methodology, a company can achieve far more cost efficiencies than just a reduction in the initial training spend.
So where do you start? A typical assignment would have the following components:
Have defined ownership of the supplier rationalization project, preferably driven by the global learning team.
Define the subject areas that you need to have addressed. Most teams would like to address everything when starting on such a project. But, it is important to limit the scope of such exercise to key development areas that are business-critical and aligned with the company goals.
Complete data collection and review of existing learning supplier base. This helps you establish the baseline for further analysis. This could be a very tedious process and some form of automation helps tremendously.
The sourcing team is your best partner during this exercise! What is critical is for the global learning team to drive the assignment (setting objectives, outcomes etc), and for the Sourcing team to provide inputs (RFI, RFP, evaluation criteria etc.)
Brainstorm on the criteria that would be used to evaluate shortlisted suppliers. This could be a combination of business, sourcing, legal and commercial elements. This is critical to ensure that the RFI and RFP have the right questions for analysis.
Keep all stakeholders informed and engaged as you move along in the process.
If any such initiatives have been conducted in other parts of the company, get them to share what worked and what did not work for them. Do not re-invent the wheel.
The outcome of such an exercise would be a list of preferred training content suppliers by subject areas. This list is then published to the various business units and functional training groups who would leverage preferred suppliers to meet their learning needs at preferred pricing and getting consistent quality. A short term investment in understanding corporate spend on learning content suppliers yields a wealth of understanding in controlling related future costs.
